New to Canada
Applying for a mortgage is a fairly simple process for a Canadian citizen. However, for individuals who have recently moved to a country and are not citizen yet but still requires a mortgage, the process is much more difficult.
There are 3 factors that determines what kind of mortgage that you will qualify for as a newcomer in Canada. The 3 factors are
- Whether you are a permanent resident
- The size of your down payment
- Your credit score
Basically, there are 5 different scenario that a newcomer can fall into when it comes to a mortgage application.
You are a permanent resident, have a good credit score and have a down payment of 5% or more. This is the best care scenario because with these qualifications, you qualify for a regular mortgage, the same as any Canadian citizen
You are a permanent resident, have a down payment of 5% or more but your credit score is not adaquate. In this scenario, it is not ideal but it is still pretty good. You are still qualify for New to Canada program offered by the 3 mortgage default insurance providers.
You are a not permanent resident, but you have a valid work permit and you have submitted your application. Not other that, but you have a good credit score and a down payment of 5% or more. In this scenario, you are qualify for a regular mortgage just like the first case.
You are a not permanent resident, but you have 10% or more down payment. In this scenario, your credit score does not matter at all. It can be good or weak. You are qualify for New to Canada Program.
You are a not permanent resident, and you do not have 10% or more down payment. In this scenario, your credit score does not matter at all as well. It can be good or weak. But in this case, you are not qualify for any mortgage.
How to Qualify for the New to Canada Program?
For some people who have recently moved to Canada, you may not qualify for a regular mortgage but you could be eligible for New to Canada Program offered by mortgage insurers. In be qualified for the program, you must show that you have a good credit score. This can be achieved in different of ways.
- Making payments for any loan on time
- Paying all bills on time, such as utility bills
- Consistently paying off credit card in full